Stake-holder Firms and the Reform of Local Public Finance in China
12 Pages Posted: 18 Feb 2021
Date Written: January 18, 2021
Since 1978 China has developed strongly using a particular form of capitalism which has relied upon close relations between private enterprise and the state and the continuing presence of state-owned enterprise, both centrally and at local levels. This model has been criticised as being responsible for the rapid rise of debt since 2010 and the slow-down of growth more recently. Using examples taken from Guangdong Province in south China I illustrate the workings of this system and highlight the challenges to adapting it to support China's growth ambitions for the coming decades.
Keywords: state capitalism, debt overhang, infrastructure, local public finance, enterprise reform
JEL Classification: G3, H2, K4, P2
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